Late last year, the $33 billion Bill and Melinda Gates Foundation announced that it intended to exhaust its assets within five decades of the death of the last of its original trustees. The announcement reignited a debate within the philanthropic world: should foundations put themselves out of business by spending assets more quickly than they can replenish them, or should they grow in perpetuity by spending only part of their annual investment returns? But the debate ignores an important point. Two 2006 biographies, David Nasaw’s Andrew Carnegie and David Cannadine’s Mellon, demonstrate how difficult it is to deplete any source of massive wealth through wise philanthropy.

The two Andrews had much in common. Both had Scottish heritage: Carnegie was an adolescent immigrant, Mellon a first-generation American. Both made their fortunes in Pittsburgh, without benefit of formal education, in the late nineteenth and early twentieth centuries. But Carnegie, unlike Mellon, was born into what we would call today underprivileged circumstances. His father, perennially down on his luck, died before Andrew reached adulthood, and the harder-working parent in the family was always his mother. Despite this lack of paternal example, Carnegie learned one secret of success early in his career: finding and eliminating business inefficiencies and thus improving productivity. In his teens, after coming to America and serving a stint as a super-fast messenger boy, Carnegie became Pittsburgh’s most efficient telegraph operator, consolidating a transcription process from two steps into one. “You must be a lazy man,” he later observed, “if it takes you ten hours to do a day’s work.”

Disarming and gregarious, young Carnegie turned people’s instinctive trust for him into a precocious executive career in the railroad business. He parlayed that success into a fortune while still a young man, using his railroad experience and contacts to invest in and control companies in related industries, including the firms that eventually became Carnegie Steel and Frick Coke. He relentlessly—and ruthlessly—pursued both technological and labor efficiencies, dispassionately viewing human workers as just another raw material in the brutally competitive production process. He achieved business success not through micromanagement, but through landing the smartest managers around—including Andrew Frick, whose hiring was Carnegie’s most spectacular business coup—and then periodically monitoring their progress. Because he had chosen such competent managers, Carnegie had stopped working full-time by his mid-thirties.

Mellon, 20 years Carnegie’s junior, started out wealthy, though not as wealthy as he would later make himself. He and his brother Dick, lifelong business partners, learned from their father, who had founded what became the Mellon Bank in Pittsburgh, always to keep the bank’s balance sheet robust, so that it could seize cyclical market panics and downturns as investment opportunities. In adulthood, the brothers used the bank’s assets to identify, finance, and control promising companies. They expanded their father’s mostly local success into a national industrial empire, including providing early institutional funding for the firms that would become Gulf Oil and the aluminum giant Alcoa.

Universally considered a bit of a bore, Mellon had few extracurricular pursuits, save collecting fine European art. And instead of enjoying a long retirement devoted to intellectual pursuits and travel, as Carnegie did, Mellon devoted the later part of his life to political service, spending more than a decade in Washington as treasury secretary under Presidents Harding, Coolidge, and Hoover.

Mellon and Carnegie were among the first generations of Americans to earn wealth on an immense scale. By the time of his death in 1919, Carnegie, mostly through the public-stock sale of Carnegie Steel’s holdings, had amassed a fortune that today would amount to billions of dollars, a portion of which he gave away in his lifetime. Mellon, in the decade before his death, was also “a substantial billionaire” in today’s dollars, notes Cannadine. And while it’s safe to say that Gates’s fortune surpasses either of theirs in real terms, in the philanthropy world, Carnegie, in particular, had an influence that rivals or even surpasses Gates’s (so far). Carnegie helped to create the revolutionary world of Big Philanthropy; Gates is joining a world already populated with entrenched professionals.

The two Midases differed in their philanthropic approaches. Carnegie, the more publicly philosophical of the two, often said that giving away one’s entire fortune was an obligation for modern titans; while he provided for his wife, he didn’t even leave a separate bequest for his daughter in his will. Mellon certainly didn’t agree; he transferred much of his wealth to his two children, as well as to his ex-wife.

Another significant difference was Carnegie’s determination to concentrate his philanthropic efforts on giving “wage-earners” tools for self-improvement and enlightenment. “I was a working boy myself,” he said. “Naturally I sympathize with this class and I wish my aid to go to this class.” He’s most famous today for his library-giving program, having funded the construction costs of more than 2,000 libraries spanning the English-speaking world, including 65 branches in New York City. He also donated 8,000 organs to churches so that working men could hear classical music. Carnegie was interested in education beyond libraries, but he didn’t give donations to big universities, believing them rich enough. Instead, he gave to vocational and technical schools, as well as to southern black schools.

Except for personal causes—including ambitious projects in his twin hometowns of Dunfermline (in Scotland) and Pittsburgh, and later in life, his “peace fund” to support global arbitration—Carnegie took the same hands-off approach to philanthropy that he took to business. After determining his goals, he handed each philanthropic enterprise over to efficient executives, once boasting that he was in the “library-manufacturing business.” In that endeavor, full-time clerks would pore through applications for library grants from around the world, ensuring that applying towns agreed to provide operating funds for the libraries that Carnegie would build.

Mellon, like Carnegie, gave to causes in Pittsburgh, supporting a pioneering effort to join business objectives to academic research in science and technology. But unlike Carnegie, he had no governing philosophy driving his philanthropy, but rather a single concrete goal: to build a National Gallery for the Arts in Washington, modeled on London’s National Gallery. And again unlike Carnegie, Mellon wasn’t public about his effort: for decades, he quietly collected fine art for this purpose. Nor was Mellon hands-off: during and after his years at the treasury, he personally shepherded the planning of the gallery on the National Mall through each intricate stage of political, financial, and architectural negotiations.

Mellon persevered in his planning even through the Roosevelt years, during which, as a recently ousted free-market Republican against the backdrop of the New Deal, it seemed he was Public Enemy Number One in Washington. FDR appointees subjected him to a politically driven trial based on a novel reading of arcane tax law (he was posthumously exonerated). The ex–treasury secretary swallowed his pride long enough to convince Roosevelt to support the planned gallery, which the American people would own but an independent board oversee. The board would choose its own successor trustees in perpetuity, insulating it from patronage or political meddling.

But perhaps Mellon’s greatest contribution was to save future generations of Americans from a piece of horrible modernist architecture to house the nation’s finest art. Defying supporters of a modernist Le Corbusier–style design for the gallery, Mellon insisted on a classical building, choosing architect John Russell Pope, who had built the Frick in New York, to draw up blueprints. Mellon worked with his hand-picked architect to design what Cannadine describes as an “inviting succession of intimate, restful, almost domestic little chambers, arranged around the central rotunda and the two garden courts.” He personally chose Tennessee marble for the building and, near death, intervened one last time with Washington’s Commission of Fine Arts to head off modernist tinkerers. Many Americans today associate Carnegie with the nation’s public libraries, but they don’t remember Mellon when they think of the National Gallery. That’s no accident. Mellon wanted the gallery to be a national asset, not a symbol of a benefactor’s largesse, fearing future donors would shy away from giving art to what had been an individual’s pet project.

Carnegie and Mellon both set up huge foundations to oversee their philanthropy, and thus pioneered institutional giving. But neither man wanted his philanthropic enterprises to outlast him. Carnegie chartered the Carnegie Corporation in 1911 only because he realized, toward the end of his life, that despite his hyper-efficient efforts to give his fortune away, “he had been defeated . . . by the inexorable logic of compound interest,” Nasaw notes. He could not give his money away fast enough to keep up with its investment profits.

Mellon established a charitable foundation to support the National Gallery, and he planned carefully so that it would exhaust its assets within five decades. Unlike Carnegie, Mellon died thinking that he had succeeded, and in a way he did: in 1980, his original trust gave away its last grant and closed up shop. But Mellon’s two children flouted his wishes, using what had originally been his money to set up their own foundations after his death—eventually merging them and naming the entity after their father. Despite their founders’ initial intent, the Carnegie and Mellon foundations are among the nation’s top grant-giving institutions today, with assets of $2.5 billion and $5.6 billion, respectively.

The Gates Foundation faces a similar challenge, though its trustees are, at least, aware of the immense task they face. Even if its assets earn only a middling return, the Gates Foundation already must spend more than $3 billion every year just to avoid making more money. But it spent less than $1.6 billion in 2005. Further, it can’t “spend” that money by transferring huge chunks to other foundations that just use it to beef up their own big endowments; that’s cheating.

A few wealthy foundations have liquidated their assets. The Olin Foundation, for example, successfully gave out $370 million during its lifetime in accordance with its conservative benefactor’s wishes, closing up shop in 2005. Before Olin, the Rosenwald Foundation, created by Sears, Roebuck investor and president Julius Rosenwald, purposefully exhausted what would amount to perhaps $1 billion in today’s dollars between 1917 and 1948, much of it to build schools, many in rural areas and many of them for blacks.

But Olin and Rosenwald didn’t confront the logistical difficulty of giving billions away wisely every single year. It wouldn’t be hard for the Gates Foundation to spend its fortune if it were a government--the money would soon run out if it were paying for, say, the Iraq war or New York’s Medicaid program. But it will be an unprecedented challenge for the foundation to liquidate its endowment responsibly without becoming a huge bureaucracy like a government, and sacrificing the ideals of transparency and effectiveness that the Gates trustees want to govern the enterprise.

Perhaps the Gateses want to exhaust their assets because they see--rightly--that today’s big legacy foundations don’t always spend their money in accordance with their founders’ personal values. They may also understand that it’s impossible to make future generations adhere to today’s founding principles through ironclad language in their charter documents. If a founding mission is too general, future generations can color it with their own values, but if it’s too specific, it can become obsolete.

If the Gateses do succeed (and if the Gates children and grandchildren don’t undo their parents’ feat by memorializing them in a new Gates Foundation), the philanthropic fortunes of Carnegie and Mellon will outlast theirs. But the Gateses shouldn’t lose sight of how they spend their money today, even as they must pay careful attention to how much they spend. Though Carnegie and Mellon can no longer control what the stewards of their money do, the industrious humming inside the nation’s public libraries, and the quiet beauty of the National Gallery, attest to each man’s enduring philanthropic success during his lifetime.